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STOCKHOLDERS' AGREEMENT
dated as of March 1, 2000
among
HEALTHOLOGY, INC.
AND
ITS STOCKHOLDERS
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Table of Contents
Page
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Section 1. Board of Directors.............................................1
1.1 Number of Directors........................................1
1.2 Election...................................................1
1.3 Committees.................................................3
1.4 Vacancies and Removal......................................3
Section 2. Right of First Refusal; Co-Sale Right..........................4
2.1 Restrictions on Transfer...................................4
2.2 Right of First Refusal.....................................4
2.3 Right of Co-Sale...........................................6
2.4 Non-Exercise of Rights.....................................8
2.5 Prohibited Transfers.......................................8
2.6 Permitted Transfer.........................................8
2.7 Assignment.................................................9
Section 3. Restrictions on Transfer.......................................9
3.1 General....................................................9
3.2 Legend.....................................................9
3.3 Procedures for Transferring...............................10
3.4 Termination of Restrictions...............................10
Section 4. Certain Corporate Actions.....................................10
Section 5. Miscellaneous.................................................11
5.1.Lock-Up Agreements........................................11
Xxxxxx X. Xxxxxxxxx, MD, Xxxxxxx X............................11
5.2 Termination...............................................11
This Agreement shall terminate and be of no further
force or effect from and after the consummation of
a Qualified IPO, as defined in the Investor's
Rights Agreement..........................................11
5.3 Injunctive Relief.........................................11
5.4 Assignment................................................11
5.5 Successors and Assigns....................................11
5.6 Entire Agreement..........................................12
5.7 Notices...................................................12
5.8 Modifications; Amendments; Waivers........................12
5.9 Counterparts..............................................12
5.10 Headings.................................................12
5.11 Severability.............................................12
5.12 Governing Law............................................13
5.13 Representations and Warranties...........................13
5.14 Further Assurances.......................................13
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STOCKHOLDERS' AGREEMENT, dated as of March 1st, 2000, among
HEALTHOLOGY, INC., a Delaware corporation (the "Company"), the stockholders set
forth on Schedule I attached hereto (the "Existing Stockholders"), the investor
listed on Schedule II attached hereto (the "Investor"), and the other
stockholders listed on Schedule III attached hereto (the "New Stockholders", and
collectively with the Existing Stockholders and the Investor, the
"Stockholders").
WHEREAS, upon consummation of the transactions contemplated by
the Series A Stock Purchase Agreement, dated as of the date hereof, between the
Company and the Investor (the "Series A Agreement"), the Stockholders will own
the number of shares of Common Stock, par value $.01 per share (the "Common
Stock") and the number of shares of Series A Preferred Stock, par value $.01 per
share (the "Series A Preferred Stock") of the Company as set forth on Schedule
I, Schedule II and Schedule III attached hereto (collectively, the "Shares");
and
WHEREAS, one of the conditions to the purchase by the Investor
under the Series A Agreement of the Series A Preferred Stock is the execution of
an agreement relating to the election of members to the Company's Board of
Directors (the "Board of Directors") and restrictions on the terms of
dispositions by the Stockholders of their Shares.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and the investment by the Investor under the Series
A Agreement, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows (capitalized terms used herein and not defined
herein have the meanings set forth in the Series A Agreement):
Section 1. Board of Directors
1.1 Number of Directors.
The authorized number of the Board of Directors shall not be more
than nine (9). Notwithstanding the foregoing, the authorized number of directors
stated in the prior sentence may be changed upon the affirmative vote of a
majority of the members of the Board of Directors, which such vote shall include
the affirmative vote of one of the Investor Directors (as defined below).
1.2 Election.
(a) At any time at which Stockholders of the Company will have
the right to or will vote shares of capital stock of the Company in an election
of directors, Xxxxxx X. Xxxxxxxxx, M.D. shall be entitled to cause and maintain
the election to the Board of Directors of one (1) representative. Such
representative shall initially be Xxxxxx X. Xxxxxxxxx, M.D.
(b) At any time at which Stockholders of the Company will have
the right to or will vote shares of capital stock of the Company in an election
of directors, Xxxxxxx Caleb, M.D. shall be entitled to cause and maintain the
election to the Board of Directors of one (1) representative. Such
representative shall initially be Xxxxxxx Xxxxx, M.D.
(c) At any time at which Stockholders of the Company will have
the right to or will vote shares of capital stock of the Company in an election
of directors, Xxxxxx Xxxx and Xxxxxx Xxxx shall be entitled to cause and
maintain the election to the Board of Directors of one (1) representative.
(d) As long as the Investor or its Permitted Transferees (as
defined below) owns at least 50% of the aggregate amount of such shares of
Series A Preferred Stock originally purchased, any time at which Stockholders of
the Company will have the right to or will vote shares of capital stock of the
Company in an election of directors, the Stockholders shall vote all shares of
capital stock of the Company presently owned or hereafter acquired by them so as
to cause and maintain the election to the Board of Directors of two (2)
representatives designated by the Investor. Notwithstanding the foregoing, the
Investor will not have the right to designate any director if it fails to
purchase the remaining 2,211,453 shares of Series A Preferred by the Second
Closing Date, as defined in the Series A Agreement, after satisfaction by the
Company of all of the conditions to such Second Closing Date, as set forth in
the Series A Agreement. Notwithstanding anything herein to the contrary, in the
event that the Company fails to deliver to Investor a binder or policy
evidencing the insurance by March 21, 2000 and Investor does not purchase the
remaining 2,211,453 Shares in accordance with the Series A Agreement, then
Investor shall have the right to elect one (1) director. Such representatives
shall initially be Xxxxxx X. Xxxxxxxx, M.D. and Xxxx X. Xxxxxxxxx (the "Investor
Directors"), it being understood that the Stockholders shall not be obligated to
vote their shares of capital stock in favor of more than two (2) such
representatives. In the event that subsequent to the Closing Date the Company
issues $7.0 million or more in equity securities to one investor, and that
investor is only entitled to designate one (1) director (or no director), then
the Investor will be entitled to designate only one (1) director, and the
Stockholders shall vote all shares of capital stock of the Company presently
owned or hereafter acquired by them so as to cause and maintain the election to
the Board of Directors of only one (1) representative designated by the
Investor.
(e) If any Stockholder shall refuse to vote the Shares held by it
as provided in this Agreement at any meeting of the Stockholders of the Company,
or shall refuse to give its written consent in lieu of a meeting, thereupon,
without further action by such Stockholder, the President or any Vice President
of the Company shall be, and hereby is, irrevocably constituted the
attorney-in-fact and proxy of such Stockholder for the purpose of voting, and
shall vote such shares at such meeting as provided in this Agreement, or give
such consent, as the case may be. Should the provisions of this Agreement be
construed to constitute the granting of proxies, such proxies shall be deemed
coupled with an interest and are irrevocable for the term of this Agreement.
(f) It is agreed and understood that monetary damages would not
adequately compensate an injured party for the breach of this Agreement by any
party, that this Agreement shall be specifically enforceable, and that any
breach or threatened breach of this Agreement shall be the proper subject of a
temporary or permanent injunction or restraining order. Further, each party
hereto waives any claim or defense that there is an adequate remedy at law for
such breach of threatened breach.
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1.3 Committees.
At all times the Board Of Directors shall have both a
Compensation Committee and an Audit Committee in addition to such other
committees as are created by the Board of Directors. The Compensation Committee
shall be comprised of Xxxxxx X. Xxxxxxxxx, M.D., one independent director
determined in accordance with the Independent Director Standards issued by the
Securities and Exchange Commission and the American Institute of Certified
Public Accountants ("Independent Director") and one Investor Director (if any
Investor Directors have been elected to the Board). Notwithstanding the
foregoing, until an Independent Director is elected to the Board of Directors,
Xxxxxx X. Xxxxxxxxx, M.D., Xxxxxxx Caleb, M.D. and Xxxx Xxxxxxxxx shall act as
the Compensation Committee (the "Initial Compensation Committee"); provided,
however, that the Initial Compensation Committee shall not have the power to act
with respect to compensating or altering the current compensation of either
Xxxxxx X. Xxxxxxxxx, M.D. or Xxxxxxx Xxxxx, M.D., and provided, further, that
the Initial Compensation Committee shall not have the power to grant more than
(i) 100,000 options to purchase equity securities of the Company to any
individual or (ii) 500,000 options to purchase equity securities of the Company
in the aggregate without the unanimous consent of the Initial Compensation
Committee. If by the time that is sixty (60) days after the Closing Date (or
Second Closing Date) an Independent Director has not yet been elected to the
Board of Directors, the Initial Compensation Committee shall consist only of
Xxxxxx Xxxxxxxxx, M.D. and Xxxx Xxxxxxxxx, and the Board of Directors shall
break all dead-locks between them, if any. The Audit Committee shall be
comprised exclusively of Independent Directors and Investor Director(s) (if any
Investor Directors have been elected), as determined by the Board of Directors.
1.4 Vacancies and Removal.
(a) Each director designated in Section 1.2 shall be elected at
any annual or special meeting of Stockholders (or by written consent in lieu of
a meeting of Stockholders) and shall serve until his successor is elected and
qualified or until his earlier resignation or removal.
(b) The director elected by Xxxxxx X. Xxxxxxxxx, M.D. may be
removed during his or her term of office, without cause, by and only by the
affirmative vote or written consent of Xxxxxx X. Xxxxxxxxx, M.D. The director
elected by Xxxxxxx Xxxxx, M.D. may be removed during his or her term of office,
without cause, by and only by the affirmative vote or written consent of Xxxxxxx
Caleb, M.D. The director elected by Xxxxxx Xxxx and Xxxxxx Xxxx may be removed
during his or her term of office, without cause, by and only by the affirmative
vote or written consent of Xxxxxx Xxxx and Xxxxxx Xxxx. Each Investor Director
may be removed during his or her term of office, without cause, by and only by
the affirmative vote or written consent of the Investor. Each Independent
Director may be removed during his or her term of office, without cause, by and
only by the affirmative vote or written consent of not less than five directors.
(c) Any vacancy in the office of the director appointed by Xxxxxx
X. Xxxxxxxxx, M.D. may only be filled by the vote or written consent of Xxxxxx
X. Xxxxxxxxx, M.D. Any vacancy in the office of the director appointed by
Xxxxxxx Caleb, M.D. may only be filled by the vote or written consent of Xxxxxxx
Xxxxx, M.D. Any vacancy in the office of the director appointed by Xxxxxx Xxxx
and Xxxxxx Xxxx may only be filled by the vote or written consent of Xxxxxx Xxxx
and Xxxxxx Xxxx. Any vacancy in the office of any Investor Director may only be
filled by the vote or written consent of the Investor.
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(d) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
of Directors and any committees thereof. So long as the Investor shall be
entitled to appoint a director pursuant to Section 1.2(c), the Company's
Certificate of Incorporation and Bylaws shall provide for indemnification and
exculpation of directors to the fullest extent permitted under applicable law.
Section 2. Right of First Refusal; Co-Sale Right
2.1 Restrictions on Transfer.
Without limiting any other restriction contained in this
Agreement, no Stockholder may sell, assign, transfer, pledge, bequeath,
hypothecate, mortgage, grant any proxy with respect to, or in any other way
encumber or otherwise dispose of, directly or indirectly (collectively, a
"Transfer") any shares except pursuant to a Permitted Transfer (as defined
below) unless such Stockholder first complies with the provisions of Sections 2
and 3.
2.2 Right of First Refusal
(a) Transfer Notice. If at any time a Stockholder (the "Selling
Stockholder") proposes to Transfer equity securities to one or more unrelated
third parties (which parties shall be accredited investors) pursuant to an
understanding with such third parties, then such Selling Stockholder shall give
the Company and each Stockholder written notice of the Selling Stockholder's
intention to make the Transfer (the "Transfer Notice"), which Transfer Notice
shall include (i) a description of the equity securities to be transferred
("Offered Shares"), (ii) the identity of the prospective transferee(s) and (iii)
the consideration and the material terms and conditions upon which the proposed
Transfer is to be made (including a description of any expenses a Stockholder
exercising its purchase option under this Section 2.2 would be required to bear
or any indemnification such Stockholder would be required to provide pursuant to
Subsection 2.3(e) of this Agreement). The Transfer Notice shall certify that the
Selling Stockholder has received a firm offer from the prospective transferee(s)
and in good faith believes a binding agreement for the Transfer is obtainable on
the terms set forth in the Transfer Notice. The Transfer Notice shall also
include a copy of any written proposal, term sheet or letter of intent or other
agreement relating to the proposed Transfer. The Company shall provide any
information reasonably requested by a Selling Stockholder to be provided to a
potential purchaser of such Selling Stockholder's Shares.
(b) Company's Option. The Company shall have an option for a
period of ten (10) days from receipt of the Transfer Notice to elect to purchase
the Offered Shares at the same price and subject to the same material terms and
conditions as described in the Transfer Notice. The Company may exercise such
purchase option and, thereby, purchase all (or a portion of) the Offered Shares
by notifying the Selling Stockholder in writing before expiration of such ten
(10) day period as to the number of such shares which it wishes to purchase. If
the Company gives the Selling Stockholder notice that it desires to purchase
such shares, then payment for the Offered Shares shall be by check or wire
transfer, against delivery of the Offered Shares to be purchased at a place
agreed upon between the parties and at the time of the scheduled closing
therefor, which shall be not later than forty-five (45) days after the Company's
receipt of the Transfer Notice, unless the Transfer Notice contemplated a later
closing with the prospective third party transferee(s) or unless the value of
the purchase price has not yet been established pursuant to Section 2.2(e). If
the Company fails to purchase all of the Offered Shares by exercising the option
granted in this Section 2.2(b) within the period provided, the Offered Shares
shall be subject to the options granted to the Stockholders pursuant to this
Agreement.
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(c) Additional Transfer Notice. Subject to the Company's right
set forth in Section 2.2(b), if at any time the Selling Stockholder proposes a
Transfer, then, after the Company has declined to purchase all, or a portion of,
the Offered Shares, the Selling Stockholder shall give each Stockholder an
"Additional Transfer Notice" which shall include all of the information and
certifications required in a Transfer Notice and shall additionally identify the
Offered Shares which the Company has declined to purchase (the "Remaining
Shares") and briefly describe Stockholders' rights of first refusal and co-sale
(if applicable) with respect to the proposed Transfer.
(d) Stockholders' Option. The Stockholders shall have an option
for a period of twenty (20) days from the Stockholders' receipt of the
Additional Transfer Notice from the Selling Stockholder set forth in Section
2.2(c) to elect to purchase their respective pro rata shares of the Remaining
Shares at the same price and subject to the same material terms and conditions
as described in the Additional Transfer Notice. Each Stockholder may exercise
such purchase option and, thereby, purchase all or any portion of his, her or
its pro rata share (with any reallotments as provided below) of the Remaining
Shares, by notifying the Selling Stockholder and the Company in writing, before
expiration of the twenty (20) day period as to the number of such shares which
he, she or it wishes to purchase (including any reallotment). Each Stockholders'
pro rata share of the Remaining Shares shall be a fraction of the Remaining
Shares, of which the number of shares of Common Stock (including shares of
Common Stock issuable upon conversion of Preferred Shares) owned by such
Stockholder on the date of the Transfer Notice shall be the numerator and the
total number of shares of Common Stock (including shares of Common Stock
issuable upon conversion of Preferred Shares) held by all Stockholders on the
date of the Transfer Notice shall be the denominator. Each Stockholder shall
have a right of reallotment such that, if any other Stockholder fails to
exercise the right to purchase its full pro rata share of the Remaining Shares,
the other participating Stockholders may exercise an additional right to
purchase, on a pro rata basis, the Remaining Shares not previously purchased.
Each Stockholder shall be entitled to apportion Remaining Shares to be purchased
among its partners and affiliates, provided that such Stockholder notifies the
Selling Stockholder of such allocation. If a Stockholder gives the Selling
Stockholder notice that it desires to purchase its pro rata share of the
Remaining Shares and, as the case may be, its reallotment, then payment for the
Remaining Shares shall be by check or wire transfer, against delivery of the
Remaining Shares to be purchased at a place agreed upon between the parties and
at the time of the scheduled closing therefor, which shall be not later than
forty-five (45) days after the Company's receipt of the Transfer Notice, unless
the Transfer Notice contemplated a later closing with the prospective third
party transferee(s) or unless the value of the purchase price has not yet been
established pursuant to Section 2.2(e).
(e) Valuation of Property. Should the purchase price specified in
the Transfer Notice or Additional Transfer Notice be payable in property other
than cash or evidences of indebtedness, the Company (or the Stockholders) shall
have the right to pay the purchase price in the form of cash equal in amount to
the value of such property. If the Selling Stockholder and the Company (or the
Stockholders) cannot agree on such cash value within ten (10) days after the
Company's receipt of the Transfer Notice (or the Stockholders' receipt of the
Additional Transfer Notice), the valuation shall be made by an appraiser of
recognized standing selected by the Selling Stockholder and the Company (or the
Stockholders) or, if they cannot agree on an appraiser within twenty (20) days
after the Company's receipt of the Transfer Notice (or the Stockholders' receipt
of the Additional Transfer Notice), each shall select an appraiser of recognized
standing and the two appraisers shall designate a third appraiser of recognized
standing, whose appraisal shall be determinative of such value. The cost of such
appraisal shall be shared equally by the Selling Stockholder and the Company (or
the Stockholders), (with the half of the cost borne by the Stockholders pro rata
by each based on the number of shares such parties were interested in purchasing
pursuant to this Section 2.2.) The Selling Stockholder may elect, either before
or after an appraisal has been completed, to withdraw its offer to make a
Transfer, in which event all options to purchase under this Section 2.2 shall be
null and void as to such withdrawn Transfer; provided, however, that in such
event, the Selling Stockholder shall bear all the costs of the appraisal, if
any, including any costs associated with the selection and retention of
appraiser(s). If the time for the closing of the Company's purchase (or the
Stockholders') has expired but for the determination of the value of the
purchase price offered by the prospective transferee(s), then such closing shall
be held on or prior to the fifth business day after such valuation shall have
been made pursuant to this subsection.
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(f) Notwithstanding anything else contained in this Subsection
2.2, neither the Company nor any Stockholder shall have the right to purchase
any Offered Shares unless all of the Offered Shares are to be purchased pursuant
to the exercise of the right of first refusal granted hereby.
2.3 Right of Co-Sale.
(a) To the extent the Company and the Stockholders do not
exercise their respective rights of refusal as to all of the Offered Shares
pursuant to Section 2.2, then the Investor, if it so notifies the Selling
Stockholder in writing within thirty (30) days after receipt of the Transfer
Notice referred to in Section 2.2(a), shall have the right to participate in
such sale of equity securities on the same terms and conditions as specified in
the Transfer Notice. Such Investor's notice to the Selling Stockholder shall
indicate the number of shares of equity securities the Investor wishes to sell
under its right to participate. To the extent the Investor exercises such right
of participation in accordance with the terms and conditions set forth below,
the number of shares of equity securities that the Selling Stockholder may sell
in the Transfer shall be correspondingly reduced.
(b) The Investor may sell, at its discretion, all or any part of
(i) that number of shares of equity securities equal to the product obtained by
multiplying (a) the aggregate number of shares of equity securities covered by
the Transfer Notice by (b) a fraction, the numerator of which is the number of
shares of Common Stock (including shares of Common Stock issuable upon
conversion of Shares) owned by the Investor on the date of the Transfer Notice
and the denominator of which is the total number of shares of Common Stock
(including shares of Common Stock issuable upon conversion of Shares) owned by
the Selling Stockholder and the Investor on the date of the Transfer Notice or
(ii) an equivalent number of shares to that being sold by the Selling
Stockholder.
(c) The Investor shall effect its participation in the sale by
promptly delivering to the Selling Stockholder for transfer to the prospective
purchaser one or more certificates, properly endorsed for transfer, which
represent:
(i) the type and number of shares of equity securities which the Investor
elects to sell; or
(ii) that number of shares of equities securities which are at such time
convertible into the number of shares of Common Stock which the
Investor elects to sell; provided, however, that if the prospective
third-party purchaser objects to the delivery of equity securities in
lieu of Common Stock, the Investor shall convert such equity
securities into Common Stock and deliver Common Stock as provided in
this Section 2.3. The Company agrees to make any such conversion
concurrent with the actual transfer of such shares to the purchaser
and contingent on such transfer.
(d) The stock certificate or certificates that the Investor
delivers to the Selling Stockholder pursuant to Section 2.3(c) shall be
transferred to the prospective purchaser in consummation of the sale of the
equity securities pursuant to the terms and conditions specified in the Transfer
Notice, and the Selling Stockholder shall concurrently therewith remit to the
Investor that portion of the sale proceeds to which the Investor is entitled by
reason of its participation in such sale. To the extent that any prospective
purchaser or purchasers prohibits such assignment or otherwise refuses to
purchase shares or other securities from the Investor exercising its rights of
co-sale hereunder, the Selling Stockholder shall not sell to such prospective
purchaser or purchasers any equity securities unless and until, simultaneously
with such sale, the Selling Stockholder shall purchase such shares or other
securities from the Investor for the same consideration and on the same terms
and conditions as the proposed transfer described in the Transfer Notice. The
Investor shall retain all rights with respect to the Shares until receipt of
payment of the purchase price therefor.
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(e) The Investor participating in a Transfer pursuant to this
subsection 2.3 shall pay its pro rata share (based on the total number of shares
to be sold) of the expenses incurred in connection with such sale and shall be
obligated to join on a pro rata basis (based on the total number of shares to be
sold) in any indemnification or other obligations that the Selling Stockholder
originating the sale agrees to provide in connection with such sale (other than
any such obligations that relate specifically to a particular Selling
Stockholder such as indemnification with respect to representations and
warranties given by a Selling Stockholder regarding its title to and ownership
of the shares being sold), provided, however, that the Investor shall not be
obligated in connection with such sale to agree to indemnify or hold harmless
the purchasers with respect to an amount in excess of the net cash proceeds paid
to the Investor in connection with such sale. Notwithstanding the foregoing, the
Investor may elect, if it is dissatisfied with the definitive documentation
relating to its right of co-sale, to withdraw its participation under this
subsection 2.3.
2.4 Non-Exercise of Rights. To the extent that the Company and the
Stockholders have not exercised their rights to purchase the Offered Shares or
the Remaining Shares within the time periods specified in Section 2.2 and the
Investor has not exercised its rights to participate in the sale of the Offered
Shares or the Remaining Shares within the time periods specified in Section 2.3,
the Selling Stockholder shall have a period of ninety (90) days from the
expiration of such rights in which to sell the Offered Shares or the Remaining
Shares, as the case may be, upon terms and conditions (including the purchase
price) no more favorable than those specified in the Transfer Notice to the
third-party transferee(s) identified in the Transfer Notice. In the event
Selling Stockholder does not consummate the sale or disposition of the Remaining
Shares within the ninety (90) day period from the expiration of these rights,
the Company's and the Stockholder's first refusal rights and the Investor's
co-sale rights shall continue to be applicable to any subsequent disposition of
the Offered Shares or the Remaining Shares by the Selling Stockholder until such
right lapses in accordance with the terms of this Agreement. Furthermore, the
exercise or non-exercise of the rights of the Company and the Stockholders under
this Section 2 to purchase equity securities from the Selling Stockholder or to
participate in sales of equity securities by the Selling Stockholder shall not
adversely affect their rights to make subsequent purchases from the Selling
Stockholder of equity securities or subsequently participate in sales of equity
securities by the Selling Stockholder.
2.5 Prohibited Transfers.
(a) In the event a Selling Stockholder should sell any equity
securities in contravention of the Company's and the Stockholders' rights of
first refusal and the Investor's co-sale rights, such sale shall be void and the
Company agrees it will not effect such a transfer nor will it treat any alleged
transferee(s) as the holder of such shares without the written consent of all
Stockholders or the Investor, as the case may be.
(b) No Stockholder may transfer Shares to any competitor of the
Company or any party affiliated with a competitor of the Company. For purposes
of this Section 2.5(b), a "competitor" shall mean any person or entity engaged
in a business which involves (i) the production or distribution of healthcare
content, (ii) the provision of on-line health-related interactive marketing
services, (iii) the establishment of a network of healthcare professionals for
the purpose of on-line activities or (iv) the creation or maintenance of
healthcare related web sites.
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2.6 Permitted Transfer.
(a) The terms and conditions of Sections 2.1, 2.2, and 2.3 shall
not apply to any Permitted Transfer by any Stockholder. For purposes of this
Agreement, "Permitted Transfer" means (a) any transfer by any Stockholder who is
a natural person (i) to or for the benefit of any parent, sibling, spouse, child
or grandchild of such Stockholder, or to a trust for the benefit of any such
Stockholder, or to a trust for the benefit of any of the foregoing, (ii) by will
or the laws of descent and distribution or (iii) to a Stockholder or (b) any
transfer by the Investor to any of its affiliates or any Stockholders (any
person to whom a Permitted Transfer is made being defined as a "Permitted
Transferee"); provided, that it shall be a condition of each such Transfer (A)
that the Permitted Transferee agree to be bound by the terms and conditions of
this Agreement as a Stockholder and execute a counterpart of this Agreement, as
set forth in Section 4.3 and (B) voting control over the Shares to be
transferred shall be retained by the transferring Stockholder. For purposes of
this Section 2.6, an affiliate of the Investor shall mean a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Investor.
(b) The rights of Section 2.2 shall not apply to Transfers by
Stockholders that own less than .25% of the outstanding shares of Common Stock
on a fully diluted basis.
2.7 Assignment. The right of each Stockholder to purchase or sell any
equity securities from or with any Selling Stockholder may be assigned in whole
or in part to any partner, subsidiary, affiliate or Stockholder.
Section 3. Restrictions on Transfer
3.1 General.
The Shares may not be Transferred except after compliance with
the conditions specified in this Section and Section 2. Any attempt by any
Stockholder to transfer any Shares in violation of any provision of this
Agreement will be void. The Company will not be required (i) to transfer on its
books any Shares that have been transferred in violation of this Agreement, or
(ii) to treat as owner of such Shares, or to accord the right to vote or pay
dividends to any purchaser, donee or other transferee to whom such Shares may
have been so transferred.
3.2 Legend.
(a) Each certificate representing Shares shall (unless otherwise
permitted by the provisions of Section 3.4(a)) be stamped or otherwise imprinted
with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT."
(b) Each certificate representing Shares shall (unless otherwise
permitted by the provisions of Section 3.4(b)) be stamped or otherwise imprinted
with a legend in substantially the following form:
"THE TRANSFER AND VOTING OF THESE SECURITIES IS SUBJECT TO THE
CONDITIONS SPECIFIED IN A STOCKHOLDERS' AGREEMENT, DATED AS OF
MARCH 1, 2000, BETWEEN HEALTHOLOGY, INC. (THE "COMPANY"), AND THE
STOCKHOLDERS OF THE COMPANY, AND NO TRANSFER OF THESE SECURITIES
SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE
TO THE SECRETARY OF THE COMPANY."
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3.3 Procedures for Transferring.
Upon request by the Company, any Stockholder Transferring Shares
shall deliver a written opinion of counsel for such Stockholder, addressed to
the Company, stating that in the opinion of such counsel (which opinion and
counsel shall be reasonably satisfactory to the Company), the proposed Transfer
does not involve a transaction requiring registration or qualification of such
Shares under the Securities Act of 1933, as amended (the "Securities Act") or
the securities or "blue sky" laws of any state of the United States. Subject to
Section 2, such Stockholder shall be entitled to Transfer such Shares if the
Company does not reasonably object to such Transfer and request such opinion
within fifteen (15) days after delivery of Transfer Notice to the Company, or,
if it requests such opinion, after it has received such opinion. Subject to
Section 3.4, each certificate or other instrument evidencing the securities
issued upon the Transfer of any Shares (and each certificate or other instrument
evidencing any untransferred balance of such Shares) shall bear the legends set
forth in Section 3.2.
3.4 Termination of Restrictions.
(a) If (i) any Shares are sold or otherwise disposed of pursuant
to an effective registration statement under the Securities Act or in a
transaction contemplated by Section 3.3 which does not require that the Shares
so transferred bear the legend set forth in Section 3.2(a) or (ii) the holder of
Shares has met the requirements for Transfer of such Restricted Shares under
Rule 144(k) under the Securities Act (subject to the delivery of opinions as set
forth above), then the holder of such Shares shall be entitled to receive from
the Company, without expense, a new certificate not bearing the restrictive
legend set forth in Section 3.2(a).
(b) Upon the termination of this Agreement pursuant to Section
5.1, the holders of Shares shall be entitled to receive from the Company,
without expense, new certificates not bearing the restrictive legend set forth
in Section 3.2(b).
Section 4. Certain Corporate Actions
If the Stockholders of more than 66 2/3% of the Company's equity
securities, including the Series A Preferred Stock as if converted, but not
including outstanding options and warrants (on a fully diluted basis) desire to
sell all of their shares to a purchaser who wishes to purchase all of the
Company's outstanding shares at a price in excess of $3.00 per share, subject to
adjustment for stock dividends, stock splits, or similar events, then such
Stockholders shall have the right, upon twenty (20) days prior written notice,
to require the other Stockholders of the Company to sell, and the purchaser
shall purchase, all of their shares on the same terms and conditions.
9
Section 5. Miscellaneous
5.1 Lock-Up Agreements
Xxxxxx X. Xxxxxxxxx, MD, Xxxxxxx X. Xxxxx, MD, Xxxxxx Xxxx,
Xxxxxx Xxxx, BW Ventures I, LLP, Gorann, LLC, Spydre LLC and the Investor agree
to execute lock-up agreements with the Company pursuant to which such
Stockholders will agree, if so requested by the Company or any underwriters'
representative in connection with the first public offering of the Common Stock
of the Company, not to sell or otherwise transfer any securities of the Company
during a period of up to one hundred and eighty (180) days following the
effective date of the registration statement.
5.2 Termination.
This Agreement shall terminate and be of no further force or
effect from and after the consummation of a Qualified IPO, as defined in the
Investor's Rights Agreement.
5.3 Injunctive Relief.
It is acknowledged that it will be impossible to measure the
damages that would be suffered by the parties hereto if any other party fails to
comply with the provisions of this Agreement and that in the event of any such
failure, the affected party will not have an adequate remedy at law. The
affected party shall, therefore, be entitled to obtain specific performance of
the obligations hereunder and to obtain immediate injunctive relief. The other
party shall not argue, as a defense to any proceeding for such specific
performance or injunctive relief, that the affected party has an adequate remedy
at law.
5.4 Assignment.
(a) Without limiting the restrictions on transfer contained in
the Series A Agreement and in this Agreement, the Company and each Stockholder
(in the case of a transfer of Shares) shall cause any person or entity who
acquires Shares to become a Stockholder hereunder, unless at the time of such
purchase such person or entity was a Stockholder, in which case such person or
entity shall remain a Stockholder hereunder.
(b) Execution of a counterpart of this Agreement by any person or
entity who acquires Shares and an amendment adding the name or such person or
entity shall be a condition of any acquisition of such Shares by such person or
entity.
5.5 Successors and Assigns.
This Agreement shall bind and inure to the benefit of the Company
and the Stockholders and, subject to Section 5.4, their respective successors
and assigns, and such successors and assigns shall obtain all of the rights of
their respective assignors.
10
5.6 Entire Agreement.
This Agreement contains the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior arrangements
or understandings with respect hereto.
5.7 Notices.
All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument and shall be deemed to have been duly given when delivered in
person, by telecopy, by nationally-recognized overnight courier, or by first
class registered or certified mail, postage prepaid, addressed to such party at
the address set forth below or such other address as may hereafter be designated
in writing by the addressee as follows: (a) if to an Existing Stockholder, at
the address and telecopier numbers set forth on Schedule I, (b) if to the
Investor, at the address and telecopier numbers set forth in Schedule II and (c)
if to the Company, at the address set forth in the Series A Agreement. All such
notices, requests, consents and other communications shall be deemed to have
been delivered (a) in the case of personal delivery or delivery by telecopy, on
the date of such delivery, (b) in the case of nationally-recognized overnight
courier, on the next business day and (c) in the case of mailing, on the third
business day following such mailing if sent by certified mail, return receipt
requested.
5.8 Modifications; Amendments; Waivers.
The terms and provisions of this Agreement may not be modified,
waived or amended, except pursuant to a writing signed by the Company, the
Investor and the Existing Stockholders holding at least 51% of the outstanding
shares of Common Stock.
5.9 Counterparts.
This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement.
5.10 Headings.
The headings of the various sections of this agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
5.11 Severability.
It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permissible under the law
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any provision of this Agreement would be held in any
jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
11
5.12 Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to principles
governing conflicts of laws.
5.13 Representations and Warranties.
Each Stockholder represents and warrants that (a) this Agreement
has been duly authorized, executed and delivered by such Stockholder and
constitutes the valid and binding obligation of such Stockholder, enforceable in
accordance with its terms, and (b) each Stockholder has not granted and is not a
party to any proxy, voting trust or other agreement which is inconsistent with,
conflicts with or violates any provision of this Agreement. No holder of Shares
shall grant any proxy or become party to any voting trust or other agreement
which is inconsistent with, conflicts with or violates any provision of this
Agreement.
5.14 Further Assurances.
The parties shall cooperate and take such actions, and execute
such other documents as either may reasonably request in order to carry out the
provisions or purposes of this Agreement.
[Signature Pages Immediately Follow]
12
IN WITNESS WHEREOF, the parties have executed this
Stockholders' Agreement as of the date first above written.
HEALTHOLOGY, INC. SEAL HOLDINGS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx, MD By: /s/ Xxxxxx X. Xxxxxxxx, MD
------------------------------------- -----------------------------
Xxxxxx X. Xxxxxxxxx, M.D., President Xxxxxx X. Xxxxxxxx, MD
and Chief Executive Officer President and Chief Executive
Officer
13
IN WITNESS WHEREOF, the parties have executed this
Stockholders' Agreement as of the date first above written.
COMMON STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxxxxx, MD
--------------------------------------
Xxxxxx X. Xxxxxxxxx, MD
/s/ Xxxxxxx Xxxxx, MD
--------------------------------------
Xxxxxxx Caleb, MD
/s/ Xxxxxx Xxxx
--------------------------------------
Xxxxxx Xxxx
/s/ Xxxxxx Xxxx
--------------------------------------
Xxxxxx Xxxx
14
SPYDRE TECHNOLOGIES, LLC
By:
/s/ Xxxxxxx Xxxxx
--------------------------------------
Xxxxxxx Xxxxx
GORANN LLC
By:
/s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
BW VENTURES I, LLC
By:
/s/ Xxxxxx X. Xxxxxxxxx, Manager
---------------------------------------
WADE, GOLDSTEIN, LANDAU, ABRUZZO,
MACKAREY, & DAVIDSON PC
By:
--------------------------------------
Xxxxxxx X. Block
--------------------------------------
Xxxxxx Xxxx
15
--------------------------------------
Xxxx X. Xxxxxx
--------------------------------------
Xxxxx Xxxxxxxxx
--------------------------------------
Xxx X. Xxxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxx-Xxx Xxx
--------------------------------------
Xxxx X. Xxxxx
16
--------------------------------------
Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx XxXxxxx
--------------------------------------
Xxx Xxxxxxxxxxx
--------------------------------------
Xxxxxxx Xxxx
--------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------
Xxxx Xxxxxxxxxx
--------------------------------------
Xxxxxx Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxxxx
--------------------------------------
Xxxxx Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxx
17
SCHEDULE I
EXISTING STOCKHOLDERS
Number of Shares
Name of Common Stock
---- ----------------
Xxxxxx Xxxxxxxxx, M.D. 6,087,030
Xxxxxxx Caleb, M.D. 2,608,737
Spydre Technologies LLC 325,000
Gorann LLC 675,000
Xxxxxx Xxxx 250,000
Xxxxxx Xxxx 250,000
Xxxxx & Xxxx Ventures 166,667
Other 788,081
Sch-I
SCHEDULE II
INVESTOR SCHEDULE
Number of Shares
Name and Address of Series A Preferred Stock
---------------- ---------------------------
SEAL Holdings Corporation
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000 3,211,453
Sch-II
SCHEDULE III
ASSIGNEES OF INVESTOR
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